Investing.com -- Here are the top 5 things you need to know about in the markets on Wednesday, April 3.
1. Brexit Breakthrough?
British Prime Minister Theresa May offered cross-party talks to find a way out of the Brexit impasse, infuriating lawmakers in her own party who were prepared to leave the EU without a transitional deal on April 12th.
The opposition Labour Party has pressed for the U.K. to stay in a customs union with the EU, to ensure trade is not disrupted.
May signalled late Monday she would ask for a further extension to the revised Brexit deadline at an EU summit in Brussels next week. It’s still not clear whether the EU’s other 27 member states will agree to that.
The pound rose overnight on the news, and was at $1.3176 at 05:45 AM ET (09:45 GMT).
2. Futures Set to Open Higher
U.S. markets are set to open higher after a strong set of surveys of the services sector in China and Europe. The Caixin Services PMI rose to a 14-month high, well above expectations, suggesting that China’s economy is emerging from the doldrums.
IHS Markit’s Eurozone services PMI, meanwhile, hit its highest since December. Sentiment is also benefiting from fresh reports that the U.S. and China are near a deal to end their trade war. Vice Premier Liu He is due to meet with Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer later on Wednesday.
At 05:45 AM ET (09:45 GMT), the S&P 500 futures contract was indicated up 0.5%, the Dow 30 was up 0.4% and the tech-heavy Nasdaq 100 futures contract was up 0.6%
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3. Trump Called Powell in March Over Rate Policy
President Donald Trump called Federal Reserve Chair Jerome Powell in March and has continued to criticize him in meetings at the White House since, The Wall Street Journal reported.
The call took place the day that a weak employment report raised fears about the economic outlook, sending the stock market lower. The report is further evidence of pressure from the White House on the Fed to ensure that the economy doesn't falter in the second half of Trump's term. Larry Kudlow, trump's chief economic advisor, had last week called on the Fed to cut its key rate by half a percentage point.
4. Busy Day on The Economic Calendar
On the data front, the market’s attention will shift to the U.S. labor market with the ADP’s report on private payroll growth, which is often seen as a warmup act for the big Friday government nonfarm payrolls report.
Economists expect the ADP report, due at 8:15AM ET (12:15 GMT), to show that private payroll growth totalled 184,000 in March.
Later, the U.S. Institute of Supply Management will release data on March services sector activity at 10:00AM ET (14:00 GMT). Economists expect a reading of 58.1, down from 59.7 from the month earlier.
The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was down 0.3% at 96.62, after climbing a 3-1/2-week peak of 97.09 the previous day.
In the bond market, U.S. Treasury prices inched higher, pushing yields lower across the curve, with the benchmark 10-year yield falling to 2.51%, while the yield on the 30-year Treasury bond climbed to 2.92%.
5. EIA Oil Supply Report
In commodities, the U.S. Energy Information Administration will release its official weekly oil supplies report for the week ended March 29 at 10:30AM ET (14:30 GMT).
Analysts expect the EIA to report a decline of about 0.4 million barrels in crude inventories.
Prices were boosted amid news that the U.S. is considering more sanctions against Iran. The halting of loadings at a crude terminal in Venezuela also threatened to squeeze supply.